Retail Investors Surge into Stock Market Amidst KOSPI Rally

Daily Trading Volume Exceeds 11 Trillion Won as New Accounts Multiply

A significant influx of individual investors is driving robust activity in the stock market, with daily trading volumes soaring and new trading accounts rapidly increasing. This surge coincides with the KOSPI’s upward trajectory, signaling heightened retail participation.

Investor Accounts See Explosive Growth

The number of active stock trading accounts has seen a remarkable increase, climbing by approximately one million in just over a month. As of July 15th, trading accounts reached 91.28 million, up from 90.34 million on May 30th. This expansion indicates a substantial rise in engaged individual investors, as these accounts are defined by having at least one transaction within the past six months.

Daily Trading Volume Surges

The financial investment sector is witnessing an impressive jump in trading volume. From June 2nd to July 15th, individual investors were active, with average daily purchase amounts reaching 11.38 trillion won and sales hitting 11.45 trillion won. This represents a substantial increase, with trading volumes in May jumping by over 30%.

Funds Flow into Domestic Equity

Retail investors are also channeling significant capital into domestic equity funds. As of July 15th, the assets under management for domestic equity funds, excluding private equity, surpassed 66.8 trillion won. This marks an increase of over 10 trillion won since May 30th, demonstrating a strong preference for domestic stock investments among individual investors, often referred to as “Donghak ants.”

Kang Hyun-ki, head of the DB Financial Investment Research Center, commented on the trend, noting, “The domestic stock market is rising at a fierce rate than any other global stock market, and domestic investors are showing significant interest.”

ETFs Reflect Domestic Focus

The shift in investment focus is also evident in Exchange Traded Funds (ETFs). Out of the top ten most purchased ETFs over the past month, eight are centered on domestic stocks. This contrasts with earlier in the year, when investments were heavily concentrated in U.S. index ETFs. KODEX 200, tracking the KOSPI 200 index, led the pack with a net purchase of 3.03 trillion won.

Other popular domestic equity ETFs include KODEX 200 Dividend (276 billion won), KODEX Fine Chemical Sector (175.2 billion won), and TIGER 200 (137.4 billion won), underscoring the broad appeal of local equity products among individual investors.

This heightened retail participation echoes historical trends where increased individual investor activity often correlates with significant market movements. For example, during the GameStop short squeeze in early 2021, retail investors coordinated through online forums to drive up the stock’s price, demonstrating the collective power of individual investors when motivated by specific market conditions (U.S. Securities and Exchange Commission, 2021).